Schaeffer's Trading Floor Blog

Stocks On the Move: Target Corporation, Whole Foods Market, Inc., and Family Dollar Stores, Inc.

TGT, WFM, and FDO are moving sharply in Tuesday's trading

by 8/5/2014 12:48 PM
Stocks quoted in this article:

U.S. stocks are notably lower this afternoon, despite encouraging data from the services sector. Among the names making significant moves are retailer Target Corporation (NYSE:TGT), grocery chain Whole Foods Market, Inc. (NASDAQ:WFM), and discount chain Family Dollar Stores, Inc. (NYSE:FDO). Here's a quick look at how TGT, WFM, and FDO are faring on the charts today.

  • TGT is down 3% at $58.91, after the firm cut its second-quarter earnings guidance in the wake of a recent data breach. The stock is now on pace to end beneath its 80-day moving average for the first time since July 2. Prior to today's dip. Wall Street was already in the bears' corner. TGT boasts just five "strong buy" endorsements, compared to 12 tepid "holds" and four "sell" or worse ratings. Meanwhile, short interest spiked 24.3% during the past two reporting periods, and now represents nearly nine sessions' worth of pent-up buying demand, at the stock's average pace of trading. Target Corporation will unveil its second-quarter figures on Wednesday, Aug. 20, and has advanced 0.4% in the subsequent week, averaging its last eight earnings reactions.

  • WFM is 3% higher at $39.10 -- and is on pace to end the week atop its 10-week moving average for the first time since mid-March -- amid rumors that activist investor Carl Icahn has his eye on the shares. As such, the stock's front-month options are in high demand, as its 30-day at-the-money implied volatility has popped 16% to 29.1%. Speculators are gambling on more short-term upside for Whole Foods Market, Inc. this week, with buy-to-open activity detected at the weekly 8/8 39- and 40-strike calls. Today's bullish betting marks a change of pace for WFM, as its 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 1.12 -- just 13 percentage points from an annual pessimistic peak.

  • FDO has added 2.5% to flirt with $77.56, and earlier notched a record high of $79.93, amid reports that Dollar General Corp. (NYSE:DG) is mulling a bid for the firm. Just last week, Dollar Tree, Inc. (NASDAQ:DLTR) agreed to acquire FDO for roughly $8.5 billion, or $74.50 per share. At last check, FDO call volume is running at twice the intraday norm, with speculators seemingly buying to open August 80 and October 75 calls amid hopes for a bidding war.

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